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Crises and exchange rate regimes: Times to break down the bipolar view?

Author

Listed:
  • Jean-Louis Combes

    (CERDI - Centre d'Études et de Recherches sur le Développement International - UdA - Université d'Auvergne - Clermont-Ferrand I - CNRS - Centre National de la Recherche Scientifique)

  • Alexandru Minea

    (CERDI - Centre d'Études et de Recherches sur le Développement International - UdA - Université d'Auvergne - Clermont-Ferrand I - CNRS - Centre National de la Recherche Scientifique)

  • Mousse Ndoye Sow

    (IMF - International Monetary Fund - International Monetary Fund)

Abstract
We revisit the link between crises and exchange rate regimes (ERR). Using a wide panel of 90 developed and developing countries over the period 1980-2009, we find that corner ERR are not more prone to crises compared to intermediate ERR. This finding holds for different types of crises (banking, currency and debt), and is robust to a wide set of alternative specifications. Consequently, we clearly break down the traditional bipolar view: countries that aim at preventing crisis episodes should focus less on the choice of the ERR, and instead implement sound structural macroeconomic policies.

Suggested Citation

  • Jean-Louis Combes & Alexandru Minea & Mousse Ndoye Sow, 2016. "Crises and exchange rate regimes: Times to break down the bipolar view?," Post-Print halshs-01293590, HAL.
    • Handle: RePEc:hal:journl:halshs-01293590
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    Cited by:

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    2. Mohammad Karimi & Marcel‐Cristian Voia, 2019. "Empirics of currency crises: A duration analysis approach," Review of Financial Economics, John Wiley & Sons, vol. 37(3), pages 428-449, July.
    3. Levieuge, Grégory & Lucotte, Yannick & Pradines-Jobet, Florian, 2021. "The cost of banking crises: Does the policy framework matter?," Journal of International Money and Finance, Elsevier, vol. 110(C).
    4. Cruz-Rodríguez, Alexis, 2016. "Exchange Arrangements and Speculative Attacks: Is there a link?," MPRA Paper 72359, University Library of Munich, Germany.
    5. Alexis CRUZ-RODRIGUEZ, 2016. "Exchange Arrangements and Currency Crises: What´s the matter with the exchange rate classification?," Journal of Economics and Political Economy, KSP Journals, vol. 3(2), pages 377-392, June.
    6. Jurek Michał, 2018. "Choosing the exchange rate regime–a case for intermediate regimes for emerging and developing economies," Economics and Business Review, Sciendo, vol. 4(4), pages 46-63, November.
    7. Klaus Schmidt-Hebbel, 2019. "Macroeconomic Institutions: Lessons from World Experience for MENA Countries," Working Papers 1311, Economic Research Forum, revised 21 Aug 2019.

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    More about this item

    Keywords

    exchange rate regimes; economic crises; bipolar view; cerdi;
    All these keywords.

    JEL classification:

    • G1 - Financial Economics - - General Financial Markets
    • F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions
    • C35 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions

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